Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1887-09-03
THE B. AND 0. DEAL
THE CONTROL OF IHE ROAD PASSES
INTO OTHER sARDs.
Preliminary Contract Executed Transfer
ring the Management TO a New Syn
dicate-- Control Of the Telegraph.
tBy telegraph to the DIspatch.l

tBy telegraph 10 the Dispatcn-I
NV YORK, September 2.-Ever
since Mr.. Garrett wrote his letter to
Mr.. Singerly, editor Of the Record, OF
Philadelphia, breaking off the Ives ne
gotiations, he has been working to save
his Baltimore and Ohio road. Nego-
tiations were continued by HIM with }.
S. Morgan on his arrival in London,
and to-day an arrangement was ar
nounced that is only equalled by that
of the West-Shore' settlement with the
New York Central and the forming OF
the Reading syndicate TO reorganlze
that company. Both of these deals
were carried through by Drexel, Nor
gan & Co.
Edward Lauterback gave q legal
opinion to-day upon the question
whether the sterling loan made by the
Baltimore and Ohio railroad covered
the telegraph system of the company.
lie decided that the telegraph lines
were free from all liens, and on re-
ceiving this opinion the agreement, in
the nature of preliminary con-
tract, was executed. The parties to
the contract are the Baltimore and Ohio
railroad and a syndicate composed OF
J. 3. Morgan & Co., Barring Brothers
d Co., sand Brown, Shipley & Co., OF
London Drexel, Morgan q Co., Kid
der, Peabody & Co., and Brown Broth
ers & Co., of this city, and Drexel *
Co., of Philadelphia. The most i'm
portant point in the contract provides
that the management of the company
shall be placed in competent hands
satisfactory to the syndicate. A. J.
Cassatt, vice president of the Pennsyl-
vania railroad, is generally believed to
he booked as Mr.. CARROTS successor
Satisfactory contracts are also to be
made with the Pennsylvania and Read
ing railroads on all business north OF
Philadelphia, and with all the other
trunk lines entering New York, by
which all antagonism will be removed
and insure the permanent working
OF the Baltimore and Ohio in harmony
with other trunk lines. In addition TO
these contracts the line in process OF
construction from Philadelphia to New
York will be suspended and the work
on Staten Island stopped. In con-
sideration of these contracts being
signed, and with the control in their
hands the syndicate agrees to relieve
the railroad from its present embarrass-
ment byaproyiding SlO,OOO,OOO with
which to lake up the floating debt.
This will be represented by $1,000, 900
=. Dbl al Ohio consolidated IS
and $4,000, 600 preferred stock. The
floating debt as it stands amounts TO
5000, 600, mostly in the shape of GER
tificates Of indebtedness, scrip, and
notes. OF this amount Sl,OOO,OO0 Is
said to have matured on the LIST instant,
aud was the chief factor in bringing
about the present result.
One OF the parties to the syndicate
saws: "All outside enterprises Of tbs
Baltimore and Ohio company will be
sold to parties to whom they will b.
valuable. The Western Union will
control if it does not buy the telegraph
lines. and the Pullman Palace Car Com
pany will take the sleeping-car bust
ness. The express business mas already
gone to the United States Express
Company. The affairs of the railroad
company will be entirely reorganized
and placed upon sound financial
basis"
The clause OF the contract suspend
ing all work on the extension from
Philadelphia to New York is believed
to lie the keynote of the syndicate's
interest in the negotiations, and is con-
strncd 10 mean that the Baltimore and
Ohio railroad, when Invested of all ex-
tlaneous enterprises, will be operated
practically by the Pennsylvania rail
road.
After long conference OF capitalists
at the offices Of Drcxel, Morgan & Co.,
the following was issued to-day by that
firm /.
a preliminary contract has been
executed between the Baltimore and
Ohio Railroad Company, Barring Bro
theis& Co., and Brown. Shipley X Co.,
London, and their allied houses on
their side. Tins contract provides for
the negotiation OF Sj,00O0)0 Of Balti-
more and Ohio consolidated SIS and
S.. eco, 600 of Baltimore and Ohio pre-
fl1rcd stock, for the purpose Of pay
ing off the entire floating debt OF
tie company and placing it on
sound financial basis. The condi-
tons are as follows: First, the veri-
fcaton Of statements, etc, as made
second. that the management OF the
company shall be placed in competent
bands satisfactory to the syndicate
third, that satisfactory contracts shall
be made between the Baltimore and
Ohio and other roads for New York
business, which shall remove all an
taeonism between them on the subject
and insure the permanent working of
the Baltimore and Ohio in entire har-
mony with other trunk lines also avoid
the construction or threat of construc-
ton Of expensive parallel lines north
and east of Philadelphia. The houses
interested on this side are Drexel. Nor
ean Il Co., Drexel & Co., Brown Bro
o,l lillian Ecahn1t- 4 10